Estonian minister on biofuel obligation: Proper supervision in small market a common goal

TALLINN – Speaking about the biofuel obligation during question time in parliament on Wednesday, Estonian Minister of Climate Kristen Michal said that proper supervision in a small market is a common goal.

MP Aivar Kokk's question concerned environmental friendliness and taxes. He wanted to know how supervision of the fulfillment of the biofuel obligation is going.

"For years, market participants have had serious doubts that one market participant is not fulfilling the biofuel obligation as required. The corresponding violations are extensive and likely intentional. Other market participants have constantly informed various authorities about these suspicions," Kokk said.

Responding to Kokk's question, Michal said that proper supervision in a small market is definitely a common goal.

"It must definitely work properly because, as mentioned, market surveillance ensures a high-quality service to all of us as customers and it also ensures the exact fulfillment of those commitments that determine price and profitability," he added.

Michal said that, by now, a bill of amendments to the Liquid Fuel Act has been initiated to tighten supervision requirements. For example, the control period used to be a year, now it will last for half a year, and the plan also is to increase the fines for violations. The minister pointed out that from the beginning of this year, the Environmental Board, together with the Tax and Customs Board, is also collecting control samples from batches of fuel brought in by sea in order to make sure that there is a bio-component.

"The same fulfillment reporting system will be changed so that errors and non-fulfillment of obligations are already automatically detected," he said.

Commenting on the topic of the market participant, Michal replied that Olerex has received fines before -- a smaller fine for non-fulfillment of obligations in 2021, which came into effect in the fall of 2023.

"A fine of eight million has now been imposed on Olerex for the violation of the obligation in 2022 -- this is what now with this new bill, this rate will increase -- and it has been disputed," he added.

According to the minister, in addition to this, a criminal case involving a suspicion of providing false information is also pending.

"Regarding the obligation for 2023, the December report inspection has revealed a probable violation by Olerex. This may reduce the fulfillment of their initial declared biofuel obligation from 7.59 percent to 6.5 percent and would presumably mean new misdemeanor proceedings and a new fine," Michal said.